Here's How High Silver is Headed By: Jeff Clark, Senior Precious Metals Analyst
GoldSilver.com JUL 14, 2016
Many readers asked for projections on the silver price when we analyzed how high gold might go. So we did the research and have some very interesting data and projections for you on the shiny gray metal.
With silver’s higher volatility, I knew the task would be fun. But researching silver’s price history reminded me of just how volatile it can be…
I looked at all past bull markets for silver and found that more often than not, silver is, well, “spiky.” It tends to have short sudden bursts in price, exploding higher for a brief period, and then just as suddenly cooling off.
That’s not to say silver hasn’t had long bull runs—it has, as you will see—but that many of them have been bigger and shorter than gold’s.
So when you hear the old adage that “silver is more volatile than gold,” it really is true.
Here are silver’s seven biggest price run-ups over the past 40 years, along with how long each lasted.
[As with gold’s bull markets, you may calculate a few of them differently than me, but I think the result is ultimately the same.]
You can see that four of silver’s biggest bull runs in history lasted a year or less. In three of those, silver jumped between 80% and 107% in just five to seven months!
As you’d expect, the longer bull runs had bigger returns.
You history buffs know that silver’s return in the full 1970s decade far exceeded what is shown in the chart. From its $1.56 low on May 26, 1970 to its $50 high on January 21, 1980, it rose a whopping 3,105%! However, you’ll also recall it was interrupted by a two-year, 44% decline, one reason I didn’t portray it as one uptrend.
Some of you will ask… but what about manipulation? The silver price is manipulated, so how can we project how high it will go if it’s really up to the manipulators? Fair point, but this analysis is still valuable, because manipulation was occurring then, too. At least this gives us a historical view of how long and how high silver can go before the manipulators step in. One point, though: it doesn’t stop silver from having massive run-ups in price, as in the late 1970s and 2008-2011. I fully expect this to happen again, especially when a monetary crisis hits. At that point their control over the price will be broken—and they’ll lose and we’ll win.
Now on to the fun part—let’s apply those past bull markets to today. First, here’s a look at those short-term, spiky jumps…
Silver’s bear market low was $13.58 on January 28, 2016 (based on the London daily fix price). Here’s how high the silver price would go—and when it would peak—if we matched any of those short upswings from the past…
If silver were to continue its current surge, it could easily land in the mid-$20 range between now and next January. This is not to say it will—there were many advances that were smaller—but it does show it has had this kind of performance in the past.
And here are those longer bull markets applied to today…
If you’ve heard Mike talk about silver hitting triple digits, this historical data shows that that is entirely possible.
Throw in the type of financial crisis we think is ahead and the likelihood of silver surging into the $100+ range is even stronger.
Even if that doesn’t happen, history suggests much higher silver prices are ahead.
You’ll notice something else, too: every single one of these matches shows silver would peak in less than three years from now.
It could last longer, especially with the kind of monetary upheaval that’s ahead, but it does mean that in spite of the current run-up, massive gains in the silver price are likely headed our way over the next one to three years.